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DANONE
REGISTRATION DOCUMENT 2015
Danone's business highlights in 2015 and outlook for 2016
3.2 Consolidated net income review
55
Trading operating income and trading operating margin by Division
Year ended December 31
(in € millions except percentage
and bps)
Trading operating income
Trading operating margin
Like-for-like
change
2014
2015
2014
2015
Fresh Dairy Products
1,033
1,100
9.28%
9.95%
+24 bps
Waters
539
542
12.88%
11.37%
-192 bps
Early Life Nutrition
828
965
18.83%
19.32%
+142 bps
Medical Nutrition
262
286
18.28%
17.95%
+1 bp
Total
2,662
2,892
12.59%
12.91%
+17 bps
The Fresh Dairy Products Division's trading operating margin was
9.95% in 2015, up +24 bps on a like-for-like basis. Against a back-
drop of favorable price trends in raw materials, Danone pursued
structural efforts to enhance the value of its brand portfolio and
optimize the cost base, while stepping up investment in its brands,
thus mobilizing all growth drivers and making its equation for
profitable growth sustainable in 2016.
The Waters Division's trading operating margin was 11.37% in 2015,
down -192 bps on a like-for-like basis, strongly impacted by Danone's
transitioning of the
Mizone
brand in China.
The Early Life Nutrition's trading operating margin was 19.32%
in 2015, up +142 bps on a like-for-like basis, benefiting from the
success of international infant formula brands exported to China
and a favorable milk context.
TheMedical Nutrition Division's trading operatingmargin was 17.95%
in 2015, slightly up +1 bp on a like-for-like basis relative to 2014.
This stability reflects the continued geographical expansion and
growth in innovative brands of the Division. This level of profitability
is accretive for Danone and contributes to long-term value creation.
Trading operating income and trading operating margin by geographical area
Year ended December 31
(in € millions except percentage
and bps)
Trading operating income
Trading operating margin
Like-for-like
change
2014
2015
2014
2015
Europe
1,336
1,536
15.67%
17.26%
+168 bps
CIS & North America
(a)
387
388
8.56%
8.67%
-19 bps
ALMA
(b)
939
969
11.60%
10.71%
-120 bps
Total
2,662
2,892
12.59%
12.91%
+17 bps
(a) North America = United States and Canada.
(b) ALMA = Asia-Pacific/Latin America/Middle-East/Africa.
The trading operating margin of Europe was 17.26% in 2015, up
+168 bps on a like-for-like basis. The region's profitability benefited
from the success of international infant formula brands exported
to China as well as the strong margin improvement of the Fresh
Dairy Products Division.
The trading operating margin of the CIS & North America zone was
8.67% in 2015, down -19 bps on a like-for-like basis illustrating a
marked contrast between the two markets: protection of the prof-
itability equation in the CIS and investments' acceleration in North
America in the FreshDairy Products and Early LifeNutritionDivisions.
The trading operating margin of the ALMA zone was 10.71% in 2015,
down -120 bps on a like-for-like basis. This decline reflected, in
particular, Danone's transitioning of the
Mizone
brand in China as
well as the negative impact of the Dumex situation in China.